Japan's economy continues to recover

Government data released Friday showed that consumer prices excluding food rose 1.2 percent in November compared to the same month last year. It is the largest gain since November 2008.

Industrial output increased 0.1 percent, the third straight month of a rise.

The unemployment rate stayed at 4.0 percent, while jobs available rose but by less than the month before.

Economists say the Bank of Japan's monetary policy of depreciating the yen and increasing the money supply combined with Prime Minister Shinzo Abe's economic strategy such as spending on public works projects has been helping the world's third largest-economy get back on its feet.

Prices for food and basic items are also increasing. The government's data from November showed that grocery prices rose by 18.1 percent, electricity 8.2 percent and gasoline 8.7 percent.

Consumer prices excluding food and energy increased 0.6 percent compared to last year, the biggest rise since August 1998.

"From an unemployment rate perspective, the economy as a whole may not be on the upswing," said Tsutomu Watanabe, professor of economics at the University of Tokyo. "It may be that prices are increasing not because of actual consumer spending but from anticipation that prices of products will rise."

Economists say a planned consumption tax hike from 5 percent to 8 percent in April 2014 was expected to push consumer spending up before that, followed by a fall in spending after the tax hike kicks in.

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